Just Dial At a time when innovation is king for online businesses to beat competition and stay ahead in the numbers game, one of India's oldest and the first listed online classifieds player Just Dial is going back to the basics to spur growth.

Just Dial has shelved plans to re-ignite its newer offerings such as inventory management platform for sellers JD Omni, its payment wallet JD Cash and monetisation of its advanced metasearch-cum-marketplace offering Search Plus. The public company is looking to put all its energies behind reviving its core search business -its listings model.

“In the past two years, there have been too many things that we have been experimenting with. Due to the focus on newer initiatives, we lost focus on our core search business which forms the crux of our revenues,“ said Ramkumar, CFO of the company .

Just Dial believes dilution of the management's focus led to a limited expansion of the core business that led to a dip in the growth of revenue from 25% to 5% over the past couple of years. A steady rise in vertical-focused players has also seen various businesses slip away from Just Dial's wings to other players such as MakeMyTrip, BookMyShow, Zomato in travel ticketing, movie ticketing, restaurant booking etc.

Just Dial posted its fourth quarter and FY17 annual results earlier this week with muted revenues of Rs 181.7 crores, growing just 1.2% from last year. However, after multiple quarters of tepid margins, its Ebitda came in at Rs 32.2 crore -a 28.5% improvement on an annual basis, led largely by employee rationalisation, in a bid to streamline costs.

Another factor that has been hurting the business is a steady decline in the pricing mix between Tier-I, -II and smaller cities and towns. “Just Dial's growth in Tier-I markets has peaked out. Incremental growth comes from Tier-II, -III and -IV cities where population is less,“ said Shashi Bhusan, senior vice-president at IDFC Securities.

“Incrementally , the revenue per listing will keep going down, so there's a significant pressure on margins.“

The pricing decline is weighing heavily on the company , offsetting the growth in paid campaigns which has started seeing an upward trajectory over the past few quarters. “We now want to get the core search business back to double-digit growth and that is the immediate objective.We have to do whatever it takes to get it back on track. The rest of the businesses can wait,“ Ramkumar told ET.

Just Dial is looking to finally spend aggressively on advertising for which Rs 100 crore was earmarked two years ago. With its much-delayed ad campaign finally releasing this quarter, the company spent Rs 7-7.5 crores on marketing in Q4 and is looking to spend the remaining within the next three to four quarters.

But experts believe an aggressive advertising strategy to rebuild the brand for recall is two years too late.“If Yahoo starts advertising with a $1-2 billion budget, will it replace Google? It's not advertising which will drive the brand, it's capability and recall. A diminishing utility (of the core listings model) will not be compensated by advertising spend,“ says Bhusan.

Experts believe the company needs to look at newer products and services that it has put on the backburner if it wants to stay relevant and seek revenue growth. “My sense is that it would be very unlikely for them to maintain even their current (growth) momentum given where they are right now," believes Bhusan.